FEATURE-Crime-ridden state poses acid test for Mexican oil reform

TAMPICO, Mexico, June 25 (Reuters) - During Mexico's first
oil boom, Tampico was such a magnet for foreign capital that it
became the biggest oil-exporting port in the Americas and home
to grandiose architecture that inspired comparisons to Venice
and New Orleans.

A century on, Tampico is the country's kidnap capital,
racked by fear, murder and extortion that threaten to choke off
its bid to make a comeback as Mexico, the world's No. 10 crude
oil producer, opens up its oil and gas industry.

In December, President Enrique Pena Nieto ended state-run
Pemex's 75-year-old oil and gas monopoly in the hope that oil
majors will plow tens of billions of dollars into Mexico,
revitalizing an economy that has long lagged its regional peers.

Tampico, which hugs a cluster of crocodile-infested lagoons
in the northeastern state of Tamaulipas, should be well placed
to attract firms like Exxon Mobil Corp and Chevron
looking to invest in the oil and gas-rich region.

But as lawmakers finalize terms and conditions for the
energy reform, drug gangs have turned Tampico and Tamaulipas
into a maelstrom of gunfights and oil theft.

Among the atrocities on the streets of greater Tampico in
late May: seven corpses stuffed into the back of a car; a body
with all its limbs hacked off; and a man hung upside down from a
rope, with his own severed head nearby in a basket of
strawberries.

"The problem is so serious that the state and municipal
authorities can't cope," said German Pacheco, a federal
congressman for Tampico from the opposition conservative
National Action Party (PAN).

Murders in Tamaulipas have hit their highest level since
Pena Nieto took office 18 months ago, and the president has
sought to stem the violence by replacing corrupt local and state
police with federal security forces that now patrol the state.
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